Reference no: EM132179081

Multiple questions choice:

1. These individuals help firms access capital markets and advise managers about how to interact with those capital markets.
Auditors
Investment analysts
Investment bankers
Credit analysts

2. A metaphor used to illustrate how an individual pursuing his own interests also tends to promote the good of the community.
Agency theory
Angel investor
Invisible hand
Perks or perquisites

3.Statement of Retained Earnings Use the following information to find dividends paid to common stockholders during 2008.

A $75.0 million
B $30.0 million
C $95.5 million
D $24.5 million

4 Free Cash Flow You are considering an investment in Cruise, Inc. and want to evaluate the firm's free cash flow. From the income statement, you see that Cruise earned an EBIT of $203 million, paid taxes of $50 million, and its depreciation expense was $74 million. Cruise's gross fixed assets increased by $71 million from 2007 to 2008. The firm's current assets decreased by $11 million and spontaneous current liabilities increased by $6.1 million. What is Cruise's operating cash flow, investment in operating capital and free cash flow for 2008, respectively in millions?

Balance of Retained Earnings, December 31, 2007		-$25.0 m
Plus: Net Income for 2008		65.0 m
Less: Cash Dividends Paid
Preferred Stock	$5.5 m
Common Stock	? m
Total Cash Dividends Paid		? m
Balance of Retained Earnings, December 31, 2008		$10.0 m

5 rofitability and Asset Management Ratios You are thinking of investing in Tikki's Torches, Inc. You have only the following information on the firm at year-end 2008: net income = $650,000, total debt = $13.5 million, debt ratio = 40%. What is Tikki's ROE for 2008?
3.21%
12.03%
4.81%
1.93%

6. Market Value Ratios Lab R Doors' year-end price on its common stock is $52. The firm has total assets of $77 million, the debt ratio is 58%, no preferred stock, and there are 4.2 million shares of common stock outstanding. Calculate the market-to-book ratio for Lab R Doors.
6.75
12.38
4.89
1.86

7. Moving Cash Flows What is the value in year 7 of a $2,700 cash flow made in year 8 when interest rates are 11.8 percent?
$1,236.72
$2,381.40
$2,415.03
$1,106.19

8. Moving Cash Flows What is the value in year 13 of a $1,800 cash flow made in year 5 when the interest rates are 10 percent?
$3,858.46
$3,240.00
$521.40
$6,214.09

9. Interest-on-Interest Consider a $3,800 deposit earning 9 percent interest per year for 8 years. How much total interest is earned on the original deposit (excluding interest earned on interest)?
$3,771.00
$1,035.00
$2,736.00
$273.60

10. Future Value of an Annuity Due If the future value of an ordinary, 6-year annuity is $7,700 and interest rates are 7 percent, what's the future value of the same annuity due?
$7,700
$8,162
$8,239.02
$7,196.26

11. Future Value Compute the future value in year 7 of a $340 deposit in year 2 and another $140 deposit at the end of year 4 using a 9% interest rate.
$670.80
$744.60
$877.46
$704.43

12. Future Value of an Annuity What is the future value of a $580 annuity payment over 8 years if the interest rates are 7 percent?
$5,175.23
$5,950.69
$4,964.80
$996.55

13. Forecasting Interest Rates On May 23, 20XX, the existing or current (spot) one-year, two-year, three-year, and four-year zero-coupon Treasury security rates were as follows:
1R1 = 5.25%, 1R2 = 5.75%, 1R3 = 6.25%, 1R4 = 6.45%

Using the unbiased expectations theory, what is the one-year forward rate on zero-coupon Treasury bonds for year four as of May 23, 20XX
7.05%
22.00%
5.925%
6.45%

14.Time to Maturity A bond issued by a corporation on June 15, 2007 is scheduled to mature on June 15, 2024. If today is December 16, 2008, what is this bond's time to maturity?
15 years, 6 months
1 year, 6 months
17 years
15 years

15. Current Yield What's the current yield of a 6.50 percent coupon corporate bond quoted at a price of 97.15? (Round your answer to 1 decimal place.)
9.7%
6.7%
6.5%
6.3%

16. Taxable Equivalent Yield What's the taxable equivalent yield on a municipal bond with a yield to maturity of 6.50 percent for an investor in the 25 percent marginal tax bracket? (Round your answer to 2 decimal places.)
26.00 %
8.67%
6.50%
1.63%

17. Value a Constant Growth Stock Financial analysts forecast Best Buy Company (BBY) growth for the future to be 17.00 percent. Their recent dividend was $2.29. What is the value of their stock when the required rate of return is 18.33 percent?
$14.93
$201.45
$172.18
$20.15

18. Selling Stock with Commissions At your full-service brokerage firm, it costs $111 per stock trade. How much money do you receive after selling 200 shares of Time Warner, Inc. (TMX), which trades at $22.63?
$4,526.00
$4,637.00
$4,823.86
$4,415.00

19. Value a Constant Growth Stock Financial analysts forecast Wal-Mart Stores (WMT) growth for the future to be 12.00 percent. Their recent dividend was $1.73. What is the value of their stock when the required rate of return is 15.00 percent?
$.5767
$64.59
$.6459
$57.67

20. Average Return The past five monthly returns for K and Company are 5.55 percent, 5.72 percent, -.85 percent, -.15 percent, and 10.30 percent. What is the average monthly return?
4.114%
4.174%
1.739%
1.714%

21. Portfolio Weights If you own 320 shares of Air Line Inc at $19.45, 230 shares of BuyRite at $10.4, and 420 shares of Motor City at $46.45, what are the portfolio weights of each stock?
Air Line = .3299, BuyRite = .2371, MotorCity = .4330
Air Line = .3333, BuyRite = .3333, MotorCity = .3333
Air Line = .2213, BuyRite = .0850, MotorCity = .6937
Air Line = .3200, BuyRite = .2300, MotorCity = .4200

22. Portfolio Return At the beginning of the month, you owned $6,000 of Company G, $8,100 of Company S, and $1,200 of Company N. The monthly returns for Company G, Company S, and Company N were 7.35 percent, -1.51 percent, and -.22 percent. What is your portfolio return?

rev: 09_28_2016_QC_CS-63599
2.05%
2.53%
5.62%
3.03%

23. Portfolio Beta You own $34,600 of City Steel stock that has a beta of 3.40. You also own $44,500 of Rent-N-Co (beta = 1.89) and $21,900 of Lincoln Corporation (beta = -.71). What is the beta of your portfolio?
4.56
1.00
4.58
1.84

24. Portfolio Beta You own $1,600 of City Steel stock that has a beta of 1.63. You also own $6,300 of Rent-N-Co (beta = 1.93) and $5,300 of Lincoln Corporation (beta = 1.03). What is the beta of your portfolio (closest to)?
1.00
4.59
1.53
3.24